Time to End Nuclear Socialism, Says New Study

A nuclear plant will cost $7,000 to $10,000 per kilowatt, says Mark Cooper of the University of Vermont. That’s more than wind, solar, storage and other renewables—and the price tag will continue to climb.

It shouldn't be called the French Nuclear Miracle, says Mark Cooper. It's more like a recurring nightmare.

Unlike computers, solar panels, wind turbines and most other high tech projects, nuclear power plants and projects don't go down in price over time. Instead, the costs escalate, and that's a recipe for a disaster, according to a report released today by Mark Cooper, senior fellow for economic analysis at the Institute for Energy and the Environment at Vermont Law School. (Here is a link to the full report.)

Rising costs means more expensive energy, he said. It also undermines the purpose of subsidies like government-backed loan guarantees, because the subsidies can't be phased out due to the continuing price increases. Worse, the vast scope of nuclear projects invariably absorbs the mental energy of utilities and crowd outs investment in other renewables and energy efficiency.

"The French Nuclear Miracle is a misconception. There is no reason to think that things will change if the U.S. follows France," he said. "It would replicate what I call Nuclear Socialism. Nuclear power would remain a ward of the state."

While safety has long been a flashpoint, cost and construction issues actually represent much larger problems for the nuclear industry. Banks remain wary of funding these projects. Tight budgets and improving alternative technologies may well soon force governments to decide between funding renewables or nuclear.

Meanwhile, fossil fuel advocates say subsidies are bad -- unless we're talking about discount royalties for extraction on federal lands, liability caps and the other subsides that go their way.

Cooper is on the extreme end when it comes to pricing nuclear, but even nuclear advocates admit that cost-overruns and missed deadlines have been a chronic problem for the industry.

In the 1970s, the "overnight" cost of nuclear power, or the cost of a power plant minus interest on the loans during construction, ran around $1,000 per kilowatt in the U.S. and France when measured in 2008 dollars, according to Cooper. In the '80s, the projected price rose to $3,000 to $4,000 in the U.S., and to $2,000 to $3,000 in France. In the '90s, the projected price in the U.S. rose to $5,000 to $6,000.

Now, the overnight cost of a nuclear plant in the U.S. might be in the $7,000-to-$8,000 per kilowatt range with the all-in cost of a 2-gigawatt nuclear plant running around $20 billion to $25 billion -- in other words, $10 or more per watt.

Solar systems can be erected profitably for $2 to $4 a watt, depending on the size of the project. Modular reactors, Cooper added, won't change the picture. The fixed costs on small projects will be high and increasing the scope of the project will lead to the bloat problem experienced in other nuclear projects.

The culprits are the bidding process and construction delays, added Cooper and Stephen Thomas, professor of energy studies, University of Greenwich, London. In the U.K., Canada, South Africa and elsewhere, governments in recent years have sought bids on nuclear plants under the assumption that nuclear plants would cost $2,500 a kilowatt.

"The bids come in at two to three times that," said Thomas, and the numbers get worse over time. Changes and increasing complexity in the projects invariably means delays. Most of the nuclear projects underway today have been delayed as a result of construction and safety issues. France, he noted, owns the vast majority of shares in EDF and Areva, the nuclear energy giants in France.

The size of these projects then becomes all-consuming, retarding the growth of renewables, for both utilities and governments. The U.S. issued $8.3 billion in loan guarantees for one project earlier this year.

"The utilities become flat-out hostile to anything else that reduces the demand for power from the plant," Cooper said.

So without nuclear, where can the U.S. get baseline power? "The best baseload is efficiency," he said. "We have other alternatives that are less costly."